SINGAPORE: An Affordable Homes Scheme proposed by the Progress Singapore Party (PSP) is in substance a prepaid rental scheme with an “option to buy”, said Second Minister for National Development Indranee Rajah in Parliament on Tuesday (Feb 7).
She also said that the scheme would raid Singapore’s reserves.
She was speaking in a debate on two motions on public housing filed by the PSP and by Minister for National Development Desmond Lee.
Non-Constituency MP Leong Mun Wai (PSP) had tabled the first motion, and in his opening speech proposed the Affordable Homes Scheme.
The scheme proposes that flat buyers do not have to pay land cost when they buy a new flat from HDB. The payment of the land cost will be deferred and paid only if the flat is sold after the Minimum Occupation Period, Mr Leong had said.
“Hence as long as Singaporeans are leasing HDB flats for owner-occupation, they should not have to pay for the land cost. They should only pay the land cost when they take the HDB flats to be an investment and sell it for a profit,” he said.
Ms Indranee said that the PSP’s proposal still involves selling state land cheaply, as taxpayers would bear the cost of the land while the “user” stays there.
This will shrink the value of the reserves each time land is used for public housing, and over time there will be less resources to deal with crises and other public expenditure.
“Despite Mr Leong’s claims that he is not raiding the reserves, his proposal does exactly that,” she said.
“Under the PSP model, those who choose not to sell their flats will enjoy a large subsidy at everyone else’s expense.”
Mr Lee also responded to the PSP scheme in his closing speech in the debate, saying that some people need to sell their flats because their life circumstances change, and not just to make money.
“I think if the PSP ascribes to everyone who is a reseller that you must then punish them with a certain way of pricing on resale then I don’t think that is being fair to Singaporeans,” said Mr Lee.
Mr Leong countered Ms Indranee, saying that not all the land cost would be lost and his scheme would make it “fairer” for the next generation, who can “enjoy their flats at the user price instead of the BTO price”.
“The Government’s appreciating asset narrative for the HDB flat has become untenable … it is counterintuitive also to believe that a system that relies on rising HDB prices can deliver affordability,” he said.
LEONG DENIES “FLIP-FLOPPING”
In the debate, a number of MPs accused Mr Leong of changing his proposals about public housing multiple times in the preceding months.
Said Ms Carrie Tan (PAP – Nee Soon): “Since December last year, Mr Leong kept changing his stance. He said that we should not the include the cost of the land in the prices …
“Yesterday he was also saying that we should include the land cost but we can delay and pay it back after the owners have sold the flat.
“Within a few months, he changed his stance three times. Is this reliable?”
Mr Leong strongly denied that he had been “flip-flopping” about the issue of land cost, saying that the MPs criticising his scheme have misunderstood it.
Referring to a Facebook post on Dec 8, Mr Leong said that the post only says “land costs should be taken out of the picture”.
“It should be quite clear from this that I have not called for HDB prices to be based on the historical cost of land,” he said.
Defending his proposal for the Affordable Homes Scheme, Mr Leong said that the scheme takes land cost out of the picture for people who buy flats for owner occupation.
“I did not pursue the matter up to now because I want to focus on the substance of the debate,” he said. “But I categorically reject allegations that I have been flip-flopping.”
Mr Leong was also called out for using the phrase “condemned to living in HDB flat” in a reply he made on his Facebook page in response to a commenter who said that Mr Leong’s public housing proposals will crash the property market.
Replying to a Facebook user with the handle Richard Weng, Mr Leong had written: “The resale market is not as fragile as you think. But the AHS is meant to soften resale prices that have gone up by 30 per cent in the last three years. A little moderation is healthy.
“There will continue to be solid demand from both Sporeans (sic) and PRs. Longer term under AHS, supply is expected to shrink so resale prices will hold. Sporeans are not condemned to living in HDB flat. On the contrary, now they have more CPF savings to buy private property if they want.”
Ms Tan pointed out that more than 80 per cent of Singaporeans live in HDB flats.
“How can Mr Leong Mun Wai say people are condemned to stay in HDB flats? What is wrong with staying in a HDB flat? So by saying so, does it mean that he has been trying to look down on those who live in HDB flats?” she said in Mandarin.
Clarifying the matter later, Mr Leong said he was replying to another Facebook user’s comment: “If anyone has taken offence by my choice of language, I retract the use of that word, but the quote that Ms Tan has taken is out of context.”
Ms Tan responded that the Facebook user did not use the word “condemn”, and that was Mr Leong’s choice of word.